March saw the services sector growth in India reach a 15-and-a-half-year high due to strong demand: PMI

According to a monthly poll released on Thursday, the services sector in India had one of the best growth rates in more than 13 and a half years in March due to robust demand that boosted sales and business activity.

 

One of the biggest increases in overall sales and business activity in almost 14 years was seen in March, when the seasonally adjusted HSBC India Services Business Activity Index increased from 60.6 in February to 61.2 in March.

According to the Purchasing Managers’ Index (PMI), a score of less than 50 indicates contraction while a print over 50 indicates growth.

S&P Global compiles the HSBC India Services PMI from answers to questionnaires given to a panel of around 400 service sector businesses.

After a slight decline in February, India’s services PMI increased in March as a result of robust demand that boosted sales and company activity. In order to enhance production capacity, service providers hired more people than at any other time since August 2023, according to HSBC economist Ines Lam.

According to the poll, the recovery was mostly ascribed to favorable sales trends, efficiency improvements, and strong demand conditions.

Businesses reported a notable increase in the number of new orders they received in March.

One of the highest growth rates since June 2010 was seen.

Since the series began in September 2014, new export business has increased at the quickest pace ever.

Africa, Asia, Australia, Europe, the Americas, and the Middle East were among the regions where survey respondents indicated increases.

The significant increase in new business volumes, according to service providers, put further strain on their capacity.

As a result, service companies hired more employees in March.

“The latest increase in employment was the 22nd in as many months, and the joint-strongest since November 2022,” according to the poll.

Input prices and output charges are rising at quicker rates, indicating that pricing pressures have intensified, according to the poll.

“Input costs rose at a faster rate, yet service providers were able to broadly maintain margins by charging higher output prices,” the study said.

Services firms anticipate that demand patterns will continue to be favorable in the future and that marketing initiatives will provide opportunities for expansion.

The study did note that there were some worries about pressures from competition.

In the meanwhile, the second-strongest recovery in more than 13 and a half years was highlighted by the HSBC India Composite PMI Output Index, which increased from 60.6 in February to 61.8 in March.

Weighted averages of similar PMI indices for manufacturing and services are used to create composite PMI indexes.

Official GDP statistics indicates that weights represent the relative sizes of the manufacturing and service sectors.

India’s overall production increased significantly in March, according to statistics, with both service providers and manufacturers of products seeing a pickup in growth.